Apple Shares Succumb to Panic Selling as Growth Slows (Update1)

NEW YORK (TheStreet) -- Apple's(AAPL) stock slid more than 10% after the technology company's revenue trailed forecasts, earnings per share fell and profit margins shrank.

Apple generated revenue of $54.5 billion in its fiscal first quarter, up from $46.33 billion a year earlier but below analysts' forecast of $54.73 billion. It earned $13.81 a share, down from $13.87 a year earlier yet above analysts' estimate of $13.47.

Investors dumped the stock. Apple was down to as low as $457.30 in after-hours trading, compared with $514 at the close. During the regular session, the shares climbed 1.8%.

The Cupertino, Calif.-based company, which has been stung by rumors of weaker demand, sold 47.8 million iPhones during the quarter, up from 37 million a year earlier.

Speaking during Apple's earnings conference call, CEO Tim Cook shrugged off speculation of a drop in orders. "I know there's been lots of rumors about order cut," he said in response to an analyst's question. "I would suggest it's good to question the accuracy of any kind of build plans."

Cook said Apple's supply chain is complex, relying on many sources.

The Apple CEO said the company wouldn't sacrifice product quality for market share, echoing sentiments of Steve Jobs, the late co-founder and CEO. "The most important thing to Apple is to make the best products in the world that enrich customers' lives," he said in response to another analyst's question. "We aren't interested in revenue for revenue's sake."

During its fiscal first quarter, Apple sold 22.9 million iPads, compared with 15.4 million a year earlier; 4.1 million Macs, down from 5.2 million; 12.7 million iPods, down from 15.4 million.

Apple's gross margin was 38.6% compared with 44.7% in the year-ago quarter.

For its fiscal second quarter, which ends March 31, Apple forecast revenue between $41 billion and $43 billion, a gross margin between 37.5% and 38.5%, and operating expenses between $3.8 billion and $3.9 billion.